Totsy

E-commerce selling prenatal care products

Description

Totsy, like other online shopping platforms, became widely known and used by millions of users during the era of the economic recession which brought a sudden, severe and prolonged fall in the price, value, and amount of goods. This flash sale company’s policies were extremely popular with the customers at the time, because they offered high-end fashion brands online for a low-price. They stored and sold the same fashion accessories and apparel which official stores were unable to sell for the regular price.

Stats

Category

e-Commerce

Country

United States

Started

In 2009

Closed

By 2013

Number of Founders

Two

Name of Founders

Christophe Garnier, Guillaume Gauthereau

Number of Employees

Between 51 And 100

Number of Funding Rounds

4

Total Funding Amount

$29.5M

Number of Investors

4

Precise Cause of Failure

Poor Product

Business Outcome

Shut Down

Cause of Failure

Ever-changing circumstances
were involved for the most part in the collapse of this online retailer of
high-quality and branded apparel that had a luminous moment in unstable financial
times.

In order to cope with the
recession and maintain their position above the margin, manufacturers started
to sell their stored products at heavily discounted prices, this provided
online flash sell companies with the perfect momentum to rise and thrive. Once
the economy started improving, though, and customers regained their purchasing
power, flash sales marketplaces started seeing a steady decrease in sales. At
the same time, luxury brands rapidly recovered from the previous economic
crisis and continued once again to produce their high-end product.
Manufacturers decided to not let their high-end brands sell for bargain prices
anymore and abandoned the idea of participating in flash sales in order to
maintain their reputation and stable income. This meant that flash sales lost
their core attractiveness and became generally obsolete. The momentum ended and
so did the future of the company.

A big resource for entrepreneurs and startup owners, in which we have collected and analyzed why +100 big companies have failed. Learn from mistakes, and avoid being part of the 90% of businesses that fail.

Totsy, like other online shopping platforms, became widely known and used by millions of users during the era of the economic recession which brought a sudden, severe and prolonged fall in the price, value, and amount of goods. This flash sale company’s policies were extremely popular with the customers at the time, because they offered high-end fashion brands online for a low-price. They stored and sold the same fashion accessories and apparel which official stores were unable to sell for the regular price.

Cause of Failure

Ever-changing circumstances
were involved for the most part in the collapse of this online retailer of
high-quality and branded apparel that had a luminous moment in unstable financial
times.

In order to cope with the
recession and maintain their position above the margin, manufacturers started
to sell their stored products at heavily discounted prices, this provided
online flash sell companies with the perfect momentum to rise and thrive. Once
the economy started improving, though, and customers regained their purchasing
power, flash sales marketplaces started seeing a steady decrease in sales. At
the same time, luxury brands rapidly recovered from the previous economic
crisis and continued once again to produce their high-end product.
Manufacturers decided to not let their high-end brands sell for bargain prices
anymore and abandoned the idea of participating in flash sales in order to
maintain their reputation and stable income. This meant that flash sales lost
their core attractiveness and became generally obsolete. The momentum ended and
so did the future of the company.